Francesca Gino2015-08-02T18:15:28-04:00Francesca Ginohttp://www.huffingtonpost.com/author/index.php?author=francesca-ginoCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Francesca GinoGood old fashioned elbow grease.Thinking About Money? Take Time for Self-Reflection Insteadtag:www.huffingtonpost.com,2014:/theblog//3.48244472014-02-21T09:00:00-05:002014-04-23T05:59:01-04:00Francesca Ginohttp://www.huffingtonpost.com/francesca-gino/Click here to watch the TEDTalk that inspired this post.

Do you want to be a good person, someone who cares about the well-being of others in addition to your own? I bet you do. In fact, when people across the globe are asked this question, no matter what their social status or personal situation is, the answer is always a resounding YES.

Yet our ability to behave in ways that are consistent with this answer may vary, in part due to how wealthy we are. You might think that the more money a person has, the more compassion she will show for others and the more helpful she will be to them. After all, the wealthy surely have enough resources to share.

By recognizing the pervasive effects money can have, we can be more mindful of our actions and make time to think about time. -- Francesca Gino

In fact, money can have the opposite effect, changing our attitudes and behaviors in selfish ways, explained University of California, Berkeley researcher Paul Piff in his TED talk "Does Money Make You Mean?" Being wealthy makes us feel more entitled to that wealth, Piff has found in his research, and it can also make us less, rather than more, compassionate and helpful toward others.

More generally, when people are focused on money, they behave in self-interested ways. Even merely thinking about money leads people to be less helpful and fair in their dealings with others, to be less sensitive to social rejection, and to work harder toward personal goals. In fact, money can make us so focused on our selfish motives that it can even lead us to behave unethically. In my own research, I found that university students were more likely to cheat on a task after seeing 7,000 dollar bills than after seeing 24. Similarly, across a variety of studies, participants who were primed to think about money were more likely to cheat after completing a task by inflating their performance as compared to people in a control condition.

Money is ubiquitous in our daily lives and prominent in the Western culture's psyche. So these findings might explain, at least in part, the prevalence of selfish actions and unethical behavior in society--and why, though we want to be good people, we so often diverge from our moral compass.

Given that we desire to see ourselves as good people, triggers that encourage us to reflect on who we are affect our behavior. In my research, I have found that encouraging people to think about a different precious commodity, time, leads them to reflect on who they are and makes them more conscious of how they conduct themselves. Specifically, priming people to think about time (for instance by having them count calendar days), rather than money, lead to less selfish and more ethical behavior in my experiments.

In one of the studies I conducted, half of the study participants completed a series of task while sitting in a cubicle that had a mirror on the desk. Participants who had been primed to think about money cheated 39% of the time on a task when a mirror was present and 67% when it was not. Those who had been primed to think about time cheated 32% of the time in the presence of the mirror and 36% in its absence--a percentage that is statistically the same. In this study, the mirror triggered self-reflection. This made a difference for participants who had money on their minds: they behaved more honestly. But for those participants who were thinking about time, these thoughts were sufficient to trigger self-reflection, making the mirror unnecessary in ensuring they behaved consistently with their moral compass.

"Time is money," Benjamin Franklin once said, implying that the two are roughly equal. As my research suggests, that is not the case when it comes to how the two resources influence our ethical behavior. As compared to money, time triggers greater self-reflection. Self-reflection may be a simple exercise, but it is an important one: it reminds us of our YES--that we want to be good people. By recognizing the pervasive effects money can have, we can be more mindful of our actions and make time to think about time.

Ideas are not set in stone. When exposed to thoughtful people, they morph and adapt into their most potent form. TEDWeekends will highlight some of today's most intriguing ideas and allow them to develop in real time through your voice! Tweet #TEDWeekends to share your perspective or email tedweekends@hufﬁngtonpost.com to learn about future weekend's ideas to contribute as a writer.

According to an ancient Chinese parable, an elderly woman engages in the same daily routine: She carries two large pots on the ends of a pole across her neck to a nearby stream and fills them with water. And each day, during the long walk home, one of the pots spills half its water through a crack in its side. The pot without the crack is understandably proud of its accomplishments. The cracked pot, meanwhile, feels ashamed, and confesses its feelings to the old woman. To the pot's surprise, the woman points out the cheerful flowers growing on the side of the path that the pot floats above every day. The woman explains that she enjoys picking the flowers to decorate her home--and notes that there are no flowers growing on the other side of the path, where the intact pot travels. With its narrow focus on its flaw, the cracked pot missed the bigger picture: the fact that it was helping to bring beauty to the woman's world.

Many of us fall prey to the trap of narrow focus. This is true even when objects are in plain sight, especially when our attention is diverted, as we learned in Apollo Robbins's talk "The Art of Misdirection." Apollo Robbins's talk shows us that we so easily miss the obvious, such as the fact that our watch or wallet disappeared under our eyes. Similarly, in a well-known experiment, psychologists Daniel Simons (of the University of Illinois at Urbana-Champaign) and Christopher Chabris (of Union College at Schenectady in New York) asked a group of participants to watch a short video clip in which two groups of people pass a basketball around. (You can watch the video here). One group of players is wearing black T-shirts, the other white T-shirts. Participants were told to count the number of passes made by the team wearing the white T-shirts. Halfway through the passing game, a man wearing a gorilla suit clearly walks across the screen. After watching the video, participants were asked if they had seen anything out of the ordinary. More than half of them were so intently focused on counting passes that they failed to see the gorilla.

Our thinking is hindered by an overly narrow focus on the problem at hand. The result? We miss information that could help us make better decisions. -- Francesca Gino

This finding lends support to campaigns against texting and driving, and generally suggests that our eyes don't multitask well. And as it turns out, our thinking is similarly hindered by an overly narrow focus on the problem at hand, my research suggests. The result? We miss information that could help us make better decisions.

In our research on ethical decision-making, my Harvard colleague Max Bazerman and I found that people often fail to see wrongdoing that occurs in front of their eyes, especially when ethical deterioration occurs on a slippery slope. Consider the case of an accountant with a large auditing firm. The accountant is leading an audit of a company that has a good reputation in the market. For several consecutive years, this company's financial statements have been impeccable. Given their high quality, the accountant approved them with no trepidation; meanwhile, he built a strong relationship with the company. This year, however, the client committed some legal transgressions when preparing its financial statements. Despite his strong relationship with the client, the accountant probably will notice the fact that the company broke the law, and he will refuse to certify that the financial statements were consistent with government regulations.

But what would happen if, instead, the corporation stretched the law in just one area, by a small amount? The auditor might not notice. If the firm's wrongdoings grew imperceptibly worse each year, the auditor might still overlook them. By year six, the cumulative violations might be as large as those described in the first case, yet still go unnoticed because they built up slowly, year after year.

In a series of studies, Bazerman and I found that participants' decisions mirrored those of the auditors in this example. They did not seem to notice small changes in information about others' choices, even when the decisions were clearly unethical. Narrowly focused on the task at hand, they noticed only changes that were large and abrupt.

Obviously, focus is a critical skill in our distraction-filled world. Being able to focus helps us juggle tasks and cut through swaths of information. In meetings and conference calls, we can listen in while checking our email or surfing the Internet. But when our focus is too narrow, it can lead us to miss the big picture. A wider scope would help us capture and integrate important details into our decisions.

Think of the pointillist masterpiece A Sunday Afternoon on the Island of La Grande Jatte, in which Georges-Pierre Seurat painted patterns of dots to form an image. Pointillism relies on the eye and mind's ability to blend dots of color into a fuller range of tones. Stand close to the painting at Chicago's Art Institute, and you might admire the precise flecks of color, but won't understand what you're looking at. Back away, and a landscape--and, indeed, an entire bygone society--come into view.

When we stand too close to a decision-making problem, absorbed by our information and constraints, we see the trees but not the forest. By contrast, when we back away, we become more capable of spotting crucial information that will bring the bigger picture into view.

Ideas are not set in stone. When exposed to thoughtful people, they morph and adapt into their most potent form. TEDWeekends will highlight some of today's most intriguing ideas and allow them to develop in real time through your voice! Tweet #TEDWeekends to share your perspective or email tedweekends@hufﬁngtonpost.com to learn about future weekend's ideas to contribute as a writer.

]]>Why We Only Trust Advice With a Price Tagtag:www.huffingtonpost.com,2013:/theblog//3.35099442013-06-27T14:21:52-04:002013-08-27T05:12:01-04:00Francesca Ginohttp://www.huffingtonpost.com/francesca-gino/
How can we explain such seemingly nonsensical behavior? After all, our decision to purchase a product should depend on how much we think we'll like it. And the amount of pleasure we experience when drinking a soda should depend only on its chemical composition and our level of thirst. Or, as economists would say, the utility of any consumption experience, such as enjoying a glass of wine or using our latest technological gadget, should depend on the product's intrinsic properties and our mental and physical state at the time of consumption.

Yet the Pepsi story and evidence from various consumption scenarios suggests that our purchasing decisions and enjoyment of products are influenced by other factors -- including price.

"You get what you pay for," folk wisdom tells us. Yet this is not always true, as suggested by the carefully designed tests that Consumer Reports magazine conducts on all sorts of products, ranging from cars and vacuum cleaners to TVs and kitchen gadgets. The data from these tests often illustrate that lower-priced goods are of higher quality than those that cost much more. For example, the July issue of the magazine examined 12 mass-market sunscreen brands and discovered that when it comes to SPF (a measure of protection against UVB rays), price doesn't always equal quality. Sunscreens with an SPF greater than 50, the test found, aren't significantly more effective than those with lower SPFs, but they are usually more expensive.

This evidence conflicts with a hardwired belief that most of us have: price equals quality. We tend to assume that higher-priced goods are of better quality than lower-priced ones. A simple price tag affects our perception of the quality of a product or service, leads us to expect higher quality and, in the end, causes us to actually experience higher quality during consumption.

Let's consider the case of wine. Even experts have difficulty discriminating among wines of varying quality and are affected by simple labels. For instance, in one study, wine experts who tasted a white wine infused with a red food dye described the wine using terminology appropriate to red wine: "plum" and "spicy," "thin" and "hollow."

In another study, when describing a middle-of-the-road wine bearing the false label grand-cru classe (which suggested it was an expensive wine), wine experts used elaborate and flattering adjectives such as "complex" or "balanced" to describe it. By contrast, when the exact same wine was labeled with the generic name vin de table, experts characterized it using pedestrian terms such as "simple" and "flat." In fact, the higher the tag price, the better people rate the taste of wines and other types of drinks, another study finds.

A Penny for your Wisdom

The same is true for paid services, such as expert recommendations. Whether it is financial advisers or health gurus, there seems no shortage of people seeking to charge others good money for the benefit of their wisdom. Regardless of the quality of this advice, one thing is for sure: the fact that we paid to acquire advice makes it more likely we'll follow it. In a series of laboratory studies, I found that people are more likely to listen and use advice they had paid for than advice they received for free, even though it had been made clear to them that the advice did not differ in quality. In fact, people give even more stock to advice if it is made more expensive.

These results can be explained by a human tendency that decision-making scholars call the sunk cost fallacy: Most of us tend to justify our past investments through our present and future behavior. This is why we may keep investing energy and effort in a course of action that is not paying back. And it is also why those expensive dresses or suits that you never wear are still taking up space in your closet. In the case of advice, it seems we feel compelled to use recommendations we've paid for so that we can justify the expense to ourselves. This could explain why we often take so much pride in the expensive products and services we buy, taking the number on the price tag as a signal of quality.
Francesca Gino is an associate professor of Business Administration at Harvard Business School and the author of "Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan." ]]>